Hello viewers! Welcome to this wonderful blog of mine “How to become Crorepati by investing in PPF.” All of you are known to this popular term PPF somewhere in your mind but I will tell you how to make” good amount of money” from PPF right in this blog. Several people invest in PPF as their retirement plan but they will not be successful to enjoy the best benefits of this scheme because of the lack of proper knowledge. This leads me to write about this. So, I am here with the full information about this brilliant scheme.
What is Public Provident Fund (PPF)?
PPF is basically a long term, small savings scheme of central government, works under PPF Act 1968, specially designed as a retirement plan. If you want to invest your money for your retirement and want to make good amount of money but you don’t want to take risk and you also want to save your tax then PPF is the best plan for you.
Characteristics of Public Provident Fund (PPF):
- You can invest minimum of Rs. 500/annum and maximum of Rs. 1, 50,000/annum for the lock in period of 15 years and can be extended within 1year of maturity for the multiple years of 5 any number of times.
- Spouse is allowed to invest under the same plan, whether they are earning or not. In this way, if husband and wife both want to invest in PPF, they can invest minimum of Rs. 1000/annum and maximum of Rs. 3,00,000/annum. This is the key point, several people do not aware of.
- The rate of interest is 8 % in PPF plan.
- If you want to take loan, the loan facility is also available from 3rd financial year.
- If you want to withdraw your money, it can be done only from the 7th financial year partially.
- PPF account holder is allowed to have Nominee but Joint Account facility is not available at PPF plan.
- You are allowed to open a PPF account for your wife or for minor.
- You can save tax maximum of Rs.1, 50,000/annum under PPF plan.
How to become Crorepati by investing in PPF ?
Pay attention, this is the key point of this blog: in general, people withdraw their money from the PPF plan after the lock in period (15 years). But most of the people do not aware of the fact that after 15 years; interest is calculated on compound basis. And if you extend your PPF plan to further 5 years, you can make your amount in crores. Yes, this is possible. I will explain you the things through the calculation given below:
Condition1: When one of a spouse wants to invest in PPF plan:
|Case||Deposited Amount/Year||Number Of Years||Rate of Interest||Total Deposited Amount||Maturity Amount|
Description of Condition1:
Case1: If you have deposited Rs. 1,50,000/year for 15 years then according to 8% rate of interest you will deposit total Rs. 22,50,000 in 15 years and your maturity amount after 15 years will be 43,98,642.
Case2: Now, if you have noticed in the table, you can clearly see, after 15 years, if you extend just for 5 years, your maturity amount will be huge (more than double of your deposited amount). This is because, after 15 years interest is calculated on COMPOUND basis.
Case3: In this case, it is very clear that, if you extend your plan for further 5 years, you will become CROREPATI. Even your deposited amount is Rs. 37,50,000 only.
Case4: If you are able to extend your plan for further 5 years from here, you will get approximately 2 crores.
Note: If you are taking your PPF plan at the age of 30-35 and you have no emergency to mature your money then you can easily make 1-2 crores by extending your plan just for 10-15 years.
Condition2: When both the spouse wants to invest in PPF plan:
|Case||Deposited Amount by Husband||Deposited Amount by Wife||Total/Annum||Number of Years||Rate of Interest||Total deposited Amount||Maturity Amount|
Description of Condition2:
Case1: If husband and wife both invest in PPF plan and both of them deposit Rs.1,50,000/year, then according to 8% rate of interest, in 15 years both of them deposit total amount of Rs. 45,00,000 and their maturity amount will be 87,97,284.
Case2: If husband and wife both are able to extend their plan for further 5years from here, then they will become CROREPATI by just depositing 60,00,000 and extending their plan for 5 years.
Case3: If both of them extend for further 5 years from here, then they can make 2crore+ by just depositing 75,00,000 and extending their plan for 5 years.
Note: If husband and wife both are able to invest for 20-25 years, then they should definitely invest in PPF plan and easily make more than 2 crores.
PPF Interest Rate 2018-19:
Several people search for the PPF Interest Rate 2018-19. So I am specially mention here, the PPF Interest Rate 2018-19 is 8%. Even, I have mentioned about the PPF Interest Rate 2018-19 above in this blog. So, hopefully, you have no doubt to understand about the PPF Interest Rate 2018-19. This 8% PPF Interest Rate 2018-19 is valid from 1-10-2018 to 31-12-2018. If any changes occur in PPF Interest Rate 2018-19, I will update the chnages in my blog.